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Partnerships based on Joint Ownership

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  • Blonski, Matthias
  • Herbold, Daniel

Abstract

In a unifying framework generalizing established theories we characterize under which conditions Joint Ownership of assets creates the best cooperation incentives in a partnership. We endogenise renegotiation costs and assume that they weakly increase with additional assets. A salient sufficient condition for optimal cooperation incentives among patient partners is if Joint Ownership is a Strict Coasian Institution for which transaction costs impede an efficient asset reallocation after a breakdown. In contrast to Halonen (2002) the logic behind our results is that Joint Ownership maximizes the value of the relationship and the costs of renegotiating ownership after a broken relationship.

Suggested Citation

  • Blonski, Matthias & Herbold, Daniel, 2024. "Partnerships based on Joint Ownership," Games and Economic Behavior, Elsevier, vol. 144(C), pages 183-202.
    • Handle: RePEc:eee:gamebe:v:144:y:2024:i:c:p:183-202
    DOI: 10.1016/j.geb.2024.01.007
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    More about this item

    Keywords

    Relational contracts; Joint Ownership; Property rights; Renegotiation; Coase Theorem;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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